Is This the Right Time to Add TMO Stock to Your Portfolio?
Thermo Fisher Scientific Inc. TMO is strengthening growth through innovation, artificial intelligence (AI) investments, customer partnerships and a broad commercial engine. Targeted acquisitions are further broadening its capabilities across attractive scientific and biopharma markets while deepening customer relationships. The company is seeing broad-based end-market growth, supporting stronger organic revenue growth expectations for 2026. Yet Thermo Fisher’s growth faces risks from macroeconomic uncertainty, inflation, geopolitical disruption and unfavorable currency movements.
Over the past year, shares of this Zacks Rank #2 (Buy) company have rallied 21.8% compared with the 6.6% growth of the industry and the S&P 500 composite’s gain of 16.8%.
The renowned medical and laboratory equipment provider has a market capitalization of $250.23 billion. It has an earnings yield of 3.7% compared to the industry’s negative 1.9% yield. The company’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 4.4%.
Let’s take a closer look.
Upsides for TMO
Growth Strategy Looks Promising: Thermo Fisher’s growth strategy is centered on high-impact innovation, trusted customer partnerships and its commercial engine. The company invested $364 million in research and development during the second quarter of 2026, equal to 6.9% of manufacturing revenues. New launches included the Orbitrap Tribrid Apex and Orbitrap Excedion mass spectrometers, the Vanquish Amplify UHPLC system and the PowerFlex Thermal Cycler. Together, these offerings expand analytical capabilities, improve workflow flexibility and enhance reproducibility across research and drug development applications.
Thermo Fisher is also expanding AI capabilities across its software portfolio and using AI within its PPI Business System to improve productivity, quality and customer responsiveness. The company is strengthening customer collaboration through its new U.S. Bioprocess Design Center and a precision health partnership in Singapore that combines Olink proteomics with the Orbitrap Astral platform. The commercial engine supports adoption by linking new technologies with a broad customer base and integrated service offering.
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Strategic Acquisitions to Boost Growth: Thermo Fisher’s acquisition strategy is expanding its capabilities across scientific and biopharma markets while strengthening customer relationships. The Clario acquisition added digital endpoint data solutions for clinical development, exceeded management’s second-quarter expectations and remained on track for integration. The filtration and separation business acquired from Solventum also performed well, broadening Thermo Fisher’s bioproduction offering and expected to generate $125 million of adjusted operating income from revenue and cost synergies by the fifth year after closing.
The company also added U.S. sterile fill-finish capacity through Sanofi’s New Jersey site and strengthened its next-generation proteomics portfolio through Olink. Acquisitions are expected to contribute $1.6 billion of revenues and adjusted EPS of 32 cents in 2026.
Strength in End Markets: Thermo Fisher continues to gain share as customer activity improves across its end markets. In the second quarter of 2026, pharma and biotech delivered mid-single-digit growth, led by bioproduction, clinical research and the research and safety market channel. Academic and government grew in the low single digits, while industrial and applied and diagnostics and healthcare each posted mid-single-digit growth. The improvement was broad-based, with North America growing in the low single digits, and Europe and Asia Pacific advancing in the high single digits. Management now expects organic revenue growth at the upper end of its 3%-4% range for 2026, reflecting better activity and continued execution.
What’s Weighing on TMO Stock?
Macroeconomic Risks Persist: Thermo Fisher remains exposed to changes in customer funding, capital spending and global economic conditions. Although second-quarter 2026 activity improved, North America and China grew only in the low single digits, highlighting uneven regional demand and continued sensitivity to academic, government and biotechnology spending. Tariffs, inflation and geopolitical disruption could also raise costs. Management expects 80 basis points of adjusted operating margin expansion in 2026, but weaker demand or renewed cost inflation could limit the volume leverage and productivity needed to achieve this target.
Exposure to Foreign Currency: Thermo Fisher’s global operations expose it to currency-related volatility in revenues and earnings. While foreign exchange provided a slight second-quarter revenue benefit, management lowered its expected 2026 revenue benefit to $200 million, $100 million below its prior assumption. Recent rate changes also created a 5-cent second-half adjusted EPS headwind. Continued currency volatility could weigh on reported results as the company expands in Europe and Asia Pacific.
TMO Stock Estimate Trend
The Zacks Consensus Estimate for the company’s 2026 earnings per share (EPS) has remained constant at $25.13 in the last 30 days.
The consensus estimate for 2026 revenues is pegged at $47.80 billion, implying 7.3% year-over-year growth.
Other Key Picks
Some other top-ranked stocks in the broader medical space are Veracyte VCYT, Phibro Animal Health PAHC and Globus Medical GMED.
Veracyte has an earnings yield of 4.7% against the industry’s negative 1.4% yield. Shares of the company have risen 29% compared with the industry’s 6.6% growth. VCYT’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 41.8%.
VCYT sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Phibro Animal Health, sporting a Zacks Rank #1, has an earnings yield of 10.2% compared with the industry’s 2.5% yield. Its earnings beat estimates in each of the trailing four quarters, the average surprise being 18.4%. PAHC shares have fallen 2.7% compared with the industry’s 28.7% decline over the past year.
Globus Medical, carrying a Zacks Rank #2, has an earnings yield of 6.8% against the industry’s negative 1.7% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 27.9%. GMED shares have rallied 28.9% compared with the industry’s 6.6% growth over the past year.
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This article originally published on Zacks Investment Research (zacks.com).
